Affordability Determination
The HRA Tool offers consumers a simple, anonymous Web interface to enter minimal information about: 1) eligible employee, and 2) HRA terms. Based on this input, it returns a determination whether the HRA is affordable or unaffordable, and guides the consumer on next steps accordingly.
Geographic Rating Models
To achieve the determination, the employee will enter their specific information that is uniquely required by their state’s geographic rating area model.
HRA Based Calculations
Individual Coverage HRA Calculation (ICHRA)
[(Monthly LCSP * 12) – Annualized HRA amount] / Annualized household income
Qualified Small Employer HRA (QSEHRA)
[(Monthly SLCSP * 12) – Annualized HRA amount] / Annualized household income
Results
| Greater than the Expected Contribution percentage | Unaffordable |
|---|---|
| Less than or equal to the Expected Contribution percentage | Affordable |
Example: For 2020 the factor is 0.0987
Once the affordability is determined, the results screen displayed to the employee can be broken down into 3 key sections:
- A recap of the information entered, and the ability to go back and edit if desired
- Affordability determination language and relevant information as to what that actually means. Note - Based on the HRA Type offered to the employee, the Results screen will be one of the following variations
- ICHRA Unaffordable
- ICHRA Affordable
- QSEHRA Unaffordable
- QSEHRA Affordable
- Advice on the next steps to take